FAO lowers global cereal production forecast, says inventories remain large

The UN food agency said it had slightly trimmed its forecast for world cereal production in 2015 to 2.527 billion tonnes, or 1.3 percent below the previous year’s record, mainly due to a lower forecast for maize production in China.

The Food and Agriculture Organization’s (FAO) Cereal Supply and Demand Brief said global cereal utilisation was projected to grow by one percent in 2015/16, slower than in previous years, partly due to lower oil prices curbing industrial demand for biofuel crops. At 2.529 billion tonnes, demand will only require a modest drawdown from the world’s currently large reserves, it said.

the report said the upcoming marketing season should be “generally comfortable” as a result, and world inventories by the close of season in 2016 will only be slightly below their record opening levels.

However, abnormal weather patterns associated with El Niño are expected to adversely impact cereal production in parts of Africa, Asia and Oceania, while several countries in Central America and the Caribbean, as well as in Asia, have already been affected. Dry weather in northern India also cut local cereal production in the 2015 season, it said.

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